Though India's association with the US is limited in terms of trade, it is significantly associated with financial flows from the US. The global liquidity crisis has hit India's growth story. Since the markets are interlinked, the impact of the downturn has been shared by all sectors. Retailers are quick to suffer the effects of slowdown, but often slow to recover. A tough self-assessment and a critical scan of the external environment can help retailers on where to focus. This article studies what has been learnt from past recessions and suggests approaches for the retailer to survive during tough times.

Financial crisis in the US has sent a red signal across the world. And as the modern saying goes, whenever the US sneezes, the world catches a cold. This is obvious from the way the Indian markets have crashed taking hints from a probable recession in the US and a global economic slowdown.

A recession defines a period of declining Gross Domestic Product (GDP) of a country for two or more consecutive quarters of a year. The National Bureau of Economic Research defines recession more ambiguously as "a significant decline in economic activity spread across the economy, lasting more than a few months". During recession, there are many aspects that occur simultaneously involving a fall in coincident measures of activity such as employment, financial inflow and profits.

As a result of lost confidence the demand for goods and services decreases, which leads to reduction in production, lay-offs and a sharp rise in unemployment. Investors stop spending or spend less as they have a fear that the value of the stocks will fall.

MBA Review Magazine, Indian Retail Industry, Global Liquidity Crisis, Gross Domestic Product, GDP, Global Economic Slowdown, National Bureau of Economic Research, World Markets, Business Conditions, Indian Markets, Banking System's, Fast Moving Consumer Goods, FMCG, Economic Environment, Marketing Activities, Strategic Planning, Portfolio Planning, Stock Keeping Units, SKUs.